Why Dortmund Makes Bayern Munich Feel Like Ringo Starr

At the height of the Beatles popularity in the 60s John Lennon was asked by a reporter if Ringo Starr was the best drummer in the world. His classic response was "he's not even the best drummer in the Beatles."

Bayern Munich might be feeling a similar sentiment applies to them.

Bayern Stadium (Photo credit: muitosabao)

If they beat Chelsea next weekend in the final of the UEFA Champions League Bayern Munich will be the Champion club of Europe. Unfortunately for Bayern in their own backyard they are clearly second best.

In the Olympic Stadium in Berlin on Saturday Borussia Dortmund shredded the Bayern defence to lift the German Cup. The week previous the Bundesliga concluded with Bayern Munich finishing eight points behind repeat champions Dortmund. Dortmund set a record for points in a season (81) and they also finished on a run of 28 league games without a loss.

The Cup win gives Dortmund the domestic double (winning the league and cup) for the first time in their entire 103 year history. That in itself is an achievement but what makes it truly remarkable is the seven years ago the club was one crisis meeting away from bankruptcy with debts of around $200M.

The financial hangover brought to an abrupt end one of Borussia Dortmund's most successful periods. From 1995 to 2002 Dortmund won the Bundesliga three times, the UEFA Champions League in 1997 and the Inter Continental Championship (essentially making them the World Club Champions) later the same year.

But the seeds of Borussia's financial meltdown can be traced to a decision made by the German Football Federation around the year 2000. It was then that the normally ultra-conservative German Football Federation approved a change to the potential ownership structure of German teams.

Up to then all teams had to be registered non-profit organizations. But the new rule allowed clubs to reconstitute themselves into companies and to issue shares to a level of 50% less one. The majority ownership would still rest with members but the potential for private investment was made available.

Although many clubs moved from non profit to company status Borussia Dortmund was the only club that rolled the dice and actually issued shares. The floatation was a financial windfall for the club and nearly $175M was raised.

The Borussia board saw the "windfall" as a way to finance an assault on Germany's soccer giant, Bayern Munich. But unfortunately for every good investment (expansion of Westfalenstadion Stadium to hold 80,000 which it now does almost every home game) there was a myriad of very poor decisions.

Excessive transfer fees paid for players that failed to deliver, excessive wages were offered and gratefully accepted and the club expanded into numerous side businesses that almost instantly turn into financial anchors.

By the time the smoke cleared in 2005 the value of the clubs shares had plummeted by over 80% and bankruptcy seemed almost inevitable. Along the way the club had agreed to a sale and leaseback deal on the Westfalenstadion Stadium but the club could not meet the payments schedule as well as other obligations to creditors.

Finally a creditors' agreement to reschedule the debts was agreed and it provided the club with some breathing space. What it did not allow was for any significant investment in new players and it showed in Dortmund's results.

It would take until 2008 and the arrival of Coach Jurgen Klopp before the "new" Dortmund started to appear. When he took over Klopp promised the fans "full-throttle football with passion" and over the last four years he and his team have walked the talk.

The team inherited by Klopp had an average age of 28.5 years, over the last two seasons it has not been unusual for Klopp to field a side that was over six years younger on average.

Dortmund`s coach Jürgen Klopp (Image credit: AFP via @daylife)

The club was forced to build in a more intelligent manner and to constantly maintain an eye on their bank balance. If Klopp wanted new players he had to develop them or sell some of his existing squad to finance new acquisitions - often plucked from the bargain bin.

Mario Gotze will only turn 20 in June and graduated from the youth ranks. He is considered one of the world's most promising young players.

Centre-back Mats Hummels who was allowed to leave Bayern Munich is only 23 and is now considered one of Europe's best centre backs.

Support striker Shinji Kagawa was signed from Japanese football for a pittance but is now in demand with a number of Europe's richer clubs interested in signing him.

And there are many others with centre back Neven Subotić, striker Robert Lewandowski and Kevin Grosskreutz springing to mind.

All of this has been achieved by a club operating on a smidgen of Bayern's resources. Bayern's annual wage bill is almost three times that of Borussia Dortmund - approximately $200M to $75M.

The last Forbes listing places Dortmund's revenues at less than half of that of Bayern Munich and values the club at about one-third of Bayern's worth.

But the commitment to ongoing sustainability does leave Dortmund open to raids from other larger and wealthier clubs. To date it is something Dortmund has been able to absorb and they have even found a way prosper from regular sales.

Mladen Petric, Dedê, Alexander Frei, and Nuri Sahin were all key players for Dortmund at one time but all moved on.

Sahin was the club captain when they lifted the Bundesliga plate in 2011 and his departure to Real Madrid last summer had the purveyors of gloom and doom forecasting one-season wonders.

But there is a theory that Klopp's style actually requires a constant turnover of talent. Dortmund operates on meticulous organization in all phases of the game, ceaseless pressing and hounding of the opposition and lung-bursting counter attacks from midfield and forwards.

That places a premium on players with a hunger for winning and a willingness to sacrifice for the team ethic. These tend to be qualities more readily found in younger rather than more experienced players.

During the last January transfer window there was also an interesting development that tossed a gauntlet in Bayern's general direction. Both Dortmund and Bayern made offers to sign Borussia Moenchengladbach’s Marco Reus a young attacking midfield player.

Like the school quarter-back with an eye for a cheerleader Reus is the type of player Bayern is used to getting. But this time Reus turned Bayern down and instead he will join Dortmund this summer for around $23M.

It is not the sort of rejection Bayern is used to and when combined with no domestic trophies in the last two years it is sure to draw a response. A Champions League win would be an impressive rejoinder but next season Dortmund are still going to be lying in wake in the Bundesliga.

Interesting times are ahead.

Marco Reus Borussia Mönchengladbach (Photo credit: Wikipedia)

Soccer Analyst for Fox Soccer Report and Fox Soccer News 24/7 from 2001 to 2013. I have been a soccer writer and broadcaster for over 20 years and have followed the world's game for as long as I care to remember.